FCIK applauds Union Budget initiatives, calls for swift implementation of MSME proposals 

Srinagar: The Federation of Chambers of Industries Kashmir (FCIK) has warmly welcomed the crucial infrastructure and institutional support for the manufacturing sector, recognizing its potential to drive employment and strengthen the supply chain ecosystem.

In response to the Union Budget 2025-26, presented by Finance Minister Nirmala Sitharaman, the Valley’s leading industrial body, emphasized the significance of the initiatives proposed by the Union government, including accomplishing the vision under the “National Manufacturing Mission” to support manufacturing industries of all sizes.

“We are pleased that the Finance Minister has recognized MSMEs as the second engine for economic growth and a cornerstone of the Indian economy, with specific provisions aimed at enhancing their scalability, technological up-gradation, and access to capital,” stated the Advisory Committee of FCIK, led by Shahid Kamili, after reviewing the budget provisions.

The committee noted that the recognition of MSMEs, given their 30% contribution to India’s GDP, nearly 45% of the country’s exports, and employment of around 80 million people nationwide, is highly encouraging. For the first time in years, these enterprises have received a significant boost, with a series of measures aimed at supporting their growth and long-term sustainability.

“The enhanced credit guarantee cover for MSMEs, now increased to Rs 10 crore, along with various credit schemes for the MSME sector and startups, including a dedicated Rs 10,000 crore ‘Fund of Funds’, will be crucial for advancing financial inclusion,” said FCIK.

“The introduction of the MSE Credit Card, designed to provide easier access to credit for micro manufacturing units, particularly in rural areas, has the potential to be a game-changer. If implemented smoothly, this initiative could significantly uplift small and micro enterprises, ensuring they have the financial support needed to grow and innovate,” the chamber added.

Additionally, DPI-enabled export financing and term loans of up to Rs 20 crore for well-managed export-oriented MSMEs will empower businesses to expand into international markets, benefiting export houses in J&K as well.

“Furthermore, the introduction of a new scheme aimed at empowering 5 lakh women, SC/ST first-time entrepreneurs with loans up to Rs 2 crore is a transformative step towards promoting inclusive entrepreneurship,” the chamber noted.

While expressing satisfaction with initiatives promoting financial inclusion, FCIK emphasized that the true impact will depend on the speed and efficiency with which businesses can access these funds.

The chamber also highlighted the revised investment and turnover limits for MSMEs, now enhanced to 2.5 and 2 times respectively, which will ease the burden for many small and medium enterprises nationwide.

While lauding the Union Government’s other initiatives in agriculture, IT, and skilling and reforms, FCIK expressed concerns that the focus on Jammu and Kashmir (J&K) in the Union Budget remains inadequate compared to the region’s pressing needs.

The budget’s increase in the income tax exemption limit to Rs 12 lakh is expected to save the middle and salaried classes around Rs 1 lakh crore, boosting consumption, stimulating demand, and driving growth in the manufacturing sector.

While the overall vision is commendable, FCIK stresses the need for greater attention to Jammu and Kashmir’s unique challenges to ensure the region fully benefits from national schemes.

FCIK urges the J&K government to prioritize the implementation of these schemes, aligning them with local policies to foster growth, revive key sectors, and scale up the economy. A well-defined action plan is essential to help J&K MSMEs tap into Union Budget benefits, including enhanced financial access, improved infrastructure, and a thriving ecosystem for innovation and entrepreneurship.